**Updated Oct. 23, 2015
DowntownDC has maintained a vibrant and growing retail market where retail openings and announcements offset closings, according to the DowntownDC Business Improvement District’s (BID) annual Summer 2015 Downtown Retail Survey.
From August 2014 to August 2015, the retail market grew to 2,854,000 square feet (SF) from 2,683,000 SF of occupied or announced retail space as retail openings and announcements at CityCenterDC more than offset a number of older Downtown retail and bank branch closings, according to the survey. In addition, retail space under construction grew from 29,000 SF to 64,000 SF in the last year, of which over 40 percent was pre-leased.
The Downtown retail vacancy rate declined over the past 12 months from 12.2 percent to 10.5 percent as CityCenterDC retail space became occupied or new tenants were announced. In the months leading up to August, retail vacancies rose from 9.3 percent as new vacant space became available, including 28,000 SF of exciting space at the former site of the Armenian Holocaust Museum (the former National Bank of Washington) at the southeast corner of 14th and G streets NW (619 14th Street NW).
The future of Downtown retail appears strong based on the early reports of retail sales at CityCenterDC, the openings of additional retailers at CityCenterDC planned to open this fall (Gucci, Louis Vuitton and David Yurman), the construction of new 915 and 1000 F Street NW retail space by Douglas Development, the much-anticipated plans for Anthem Row (99,000 SF of new and soon-to-be-renovated space at the two former Tech World buildings, 801 Eye Street and 800 K Street NW), the recently announced new retail plan for the Walter E. Washington convention Center and 11 new restaurant openings and announcements in late 2015 and the first half of 2016.
[2015 vs. 2014 DowntownDC BID Area Retail Space Overview Comparison (pdf)]
The largest Downtown retail vacancies recorded by the 2015 survey were:
1. 97,000 SF in 555 12th St NW: This is the old ESPN Zone space and it is currently being marketed with the space currently occupied by Barnes & Noble.
2. Approximately 30,000 SF total in several retail spaces at CityCenterDC. Much of this space is understood to be in final lease negotiations.
3. 28,000 SF on several floors at 619 14th Street in the former National Bank of Washington building.
4. 19,000 SF at the Walter E. Washington Convention Center.
All additional vacancies were less than 10,000 SF and were scattered throughout Downtown, not concentrated in any one sub-market.
In the past year, the amount of retail space under construction increased to 104,000 SF, an increase of 75,000 SF primarily due to Capitol Crossing, 600 Massachusetts Avenue NW and the Trump International Hotel, which total 20,000 SF, 19,000 SF and 16,000 SF, respectively. Additional large retail space under construction includes 601 Massachusetts Avenue NW, which totals 18,000 SF (and is all preleased). When all phases of Capitol Crossing are completed, the development will increase the total possible retail space in Downtown by a total of 75,000 SF.
Food and Beverage remained the largest use of retail space in Downtown, accounting for 50 percent of occupied or announced retail space. CityCenterDC’s additions of Fig & Olive, Mango Tree, and Centrolina and the announced Momofuku contributed to the increase of destination restaurants within the BID along with Mastro’s Steakhouse, Claudia’s Steakhouse, and the announced Tadich Grill. Including these openings and announcements, the number of destination restaurants in Downtown is projected to increase in early 2016 from 147 to 158 at the end of 2014.
The survey found that Downtown had 59 destination retail stores, with 18 at CityCenterDC and all within the Downtown Shopping District of 14th Street to 7th Street and F Street to K Street/New York Avenue. Some of the destination retailers that opened in the past year were Paul Stuart, Hermes, Caroline Herrera, Salvatore Ferragamo, Louis Vuitton and Arc’teryx. Dior and Gucci are scheduled to open by the 2015 holiday season. These new high-end retailers add to the existing market of national destination retailers in Downtown such as Macy’s, Bed Bath & Beyond, Forever 21, H&M, Gap, Urban Outfitters, Marshalls, TJ Maxx, Banana Republic, City Sports, Anthropologie, Jos A Bank, Ann Taylor, Johnston Murphy, Tumi and the announced 2016/2017 opening of American Eagle at 1000 F Street. The total SF of destination retail stores in the DowntownDC BID area this summer was 730,000 SF – equivalent to the size of a small regional mall. Shopper’s Goods retail SF (destination retail stores, electronic stores, office supply stores and other stores) made up 33 percent of total Downtown retail space, or 938,000 SF, according to the survey.
The service-oriented retail sector totaled 475,000 SF, or 17 percent of Downtown retail space, a slight decrease from 2015 marked by the closing of several bank branches.
The DowntownDC BID’s retail survey is conducted annually by the BID’s Economic Development department and this year’s survey was conducted for the second straight year by a participant in the District’s Summer Youth Employment Program (SYEP), Ronella Williams, who is enrolled this fall at Bowie State. The information gathered by the survey is utilized for analysis of the Downtown retail market and appears in the BID’s annual State of Downtown report. View the 2014 State of Downtown Report here or visit the interactive online version here.
For raw DowntownDC BID retail data or questions regarding the Summer 2015 Retail Survey, please contact Andrew Axthelm at (202) 626-1131.
Correction: This story was corrected Oct. 23 to reflect new information available to the BID regarding retail space square footage (SF). Total retail market SF as of Aug. 2015 was 2,854,000 SF instead of 2,844,000 SF and the 2014 total was 2,683,000 SF instead of 2,770,000 SF. Retail space under construction as of Aug. 2015 was 64,000 SF instead of 104,000 SF. The vacancy rate declined from 12.2 percent to 10.5 percent instead of 11.9 percent to 10.2 percent. Shoppers Goods retail SF was 938,000 SF instead of 933,000 SF. And the service-oriented retail sector totaled 475,000 SF instead of 466,000 SF. Please see the accompanying pdf report dated Oct. 23 here.